The Pay-For-Placement Search Engine
Starting in 2001 with Overture (formerly known as GoTo, now known as Yahoo! Search Marketing), a new type of search engine emerged where advertisers could “bid” for a specific ranking or position on keywords or phrases in a search engine. Contrary to algorithmic-based search engines, which use complex formulas to evaluate an actual web page and determine its relevancy to a specific keyword or phrase, an advertiser could simply “buy” its way to the top of search results pages. This was designated as “pay-for-placement” (PFP) search. Pay-per-click advertising includes pay-for-placement (PFP) and pay-for-ranking. Pay-per-click (PPC) advertising is sometimes called cost-per-click (CPC) advertising. Pay-for-placement is sometimes also called pay-for-performance.
After the creation of networks for distributing PFP advertisements from search engines to multiple other websites (including other search engines), PFP search became very effective. During 2002, the popularity of this model soared with increased spending on these programs by advertisers as well as an onslaught of additional PFP engines and ancillary support tools. As the popularity of PFP advertising increased, the demand for PFP tools increased.
Click Fraud.
Click fraud occurs in pay-per-click online advertising when a person, automated script, or computer program imitates a legitimate user of a web browser clicking on an advertisement, usually for the purpose of generating an improper charge per click. Click fraud is also called “click spam” by Yahoo. Each time an online advertisement is clicked, the owner (advertiser) of the advertisement is charged. An advertiser's PPC budget can be exhausted with multiple, successive, fraudulent clicks. Click fraud is perpetrated by many actors, including (1) those who use click fraud to increase their own personal banner advertisement revenues (via affiliate programs such as Google AdSense that place search engine advertisements on third-party websites and pay affiliates for received clicks), (2) companies who use click fraud as a way to deplete a competitor's advertising budget, (3) those who perpetrate click fraud for non-financial reasons. Fraudulent clicks originate from (1) sophisticated programs (or “bots”) that automatically click on designated companies' paid search ads, and/or (2) individuals or groups of individuals. The bots are designed to be very deceptive, using proxy servers and so forth, and can switch from search engine to search engine. Individuals and bots can dynamically change their IP address to avoid detection.
Search engine vendors and their affiliates, such as Google (with its Google AdWords service) and Yahoo (with its Yahoo Search Marketing (formerly Overture) service) directly benefit from all clicks generated by advertisements that they serve, whether the clicks are legitimate or fraudulent. Third-party websites that participate in search engine affiliate programs (such as Google AdSense) also directly benefit from click fraud. Search engine vendors are indirectly harmed by click fraud, because as click fraud increases, the vendors' advertiser clients may become frustrated with the decreased value of the services provided by the search engines. Advertisers are directly harmed by click fraud, since they pay for every click served by search engine vendors, whether the clicks are legitimate or not.
The definition of what constitutes click fraud varies depending on one's perspective. An advertiser and a search engine vendor may not agree on what constitutes click fraud. For example, if one company is researching a competitor and clicks on the competitor's PPC advertisement, that may not constitute click fraud. If the same company returns to the PPC advertisement one month later and clicks on it, that may not constitute click fraud. But clicking on it weekly or daily may constitute click fraud. And creating a program to automatically click on advertisements would most certainly constitute click fraud, especially if it were intentional. Click fraud, therefore, is determined by a combination of factors, including frequency of the actions, intent of the actors, and the identification of the actors (whether human or computer).
Inceptor's Prior Inventions.
Inceptor is the current assignee of this and other patent documents that relate to search engine marketing, some of which are discussed below.
United States Patent Application 20020038350 (Lambert et al., Mar. 28, 2002) titled “Method & system for enhanced web page delivery” discloses, in the abstract, “A system for and method of enhancing web page delivery. The invention provides the ability to control redirection of Web traffic of humans and search engine spiders. It can differentiate between these types of visitors to a Web page, track their movements, log critical information, and analyze the Web traffic in order to judge the success in driving quality traffic to some known goal on a Web site, such as a sale. The system may generate dynamically optimized web pages targeted to specific search engines, in order to optimize the search engine ranking and visibility of a Web site, such as an online marketer's Web site.”
U.S. Pat. No. 6,654,754 (Knauft et al., Nov. 25, 2003) titled “System and method of dynamically generating an electronic document based upon data analysis” discloses, in the abstract, “A system and method of generating index information for electronic documents. The system includes a client, one or more information retrieval (IR) engines, such as a search engine, which are each in communication with each other via a network. In one embodiment of the invention, the server maintains a plurality of data objects that are protected by digital rights management (DRM) software. Upon receiving a network request from one of the IR systems, the server dynamically generates an electronic document that provides index information that is associated with one of the data objects. In one embodiment of the invention, the server dynamically generates the contents of the electronic document based upon the indexing characteristics of the IR system. Furthermore, upon receiving a network request from one of the client, the server determines whether the client is authorized to access the data object that is associated with the network request. If the client is authorized to access the data object, the server transmits the data object to the user. Alternatively, if the client is not authorized to access the data object, the server dynamically prepares instructions to the client, the instructions describing additional steps the user at the client may perform to get authorized to access the data object.”
U.S. Pat. No. 6,981,217 (Knauft et al., Dec. 27, 2005) titled “System and method of obfuscating data” discloses, in the abstract, “A system and method of generating index information for electronic documents. The system includes a client, one or more information retrieval (IR) engines, such as a search engine, which are each in communication with each other via a network. In one embodiment of the invention, the server maintains a plurality of data objects that are protected by digital rights management (DRM) software. Upon receiving a network request from one of the IR systems, the server dynamically generates an electronic document that provides index information that is associated with one of the data objects. In one embodiment of the invention, the server dynamically generates the contents of the electronic document based upon the indexing characteristics of the IR system. Furthermore, upon receiving a network request from one of the clients, the server determines whether the client is authorized to access the data object that is associated with the network request. If the client is authorized to access the data object, the server transmits the data object to the user. Alternatively, if the client is not authorized to access the data object, the server dynamically prepares instructions to the client, the instructions describing additional steps the user at the client may perform to get authorized to access the data object.”
U.S. patent application Ser. No. 10/883,556 (Sack, Jul. 1, 2004) titled “BID MANAGEMENT OPTIMIZATION SYSTEM AND APPARATUS,” discloses, in the abstract, “Bid management with a robust set of rules that ties bids to actual site-side performance. From site-side performance data, the invention creates an optimal portfolio of keywords by determining optimal mix of keywords, position, and bids to achieve greatest return for risk, comparing keywords against one another to determine allocation of budget, and automatically implementing recommendations.” With this invention, an advertiser can manage multiple P4P search engine accounts from a single interface. The 10/883,556 application is hereby incorporated by reference in its entirety.